*** ACCA P2 March 2017 Exam was.. Instant Poll and comments ***

Which paper you referring to ,UK based or INT?

@roshrosh22 said:
Which paper you referring to ,UK based or INTERNATIONAL?

I’m referring to INT

@roshrosh22 said:
Which paper you referring to ,UK based or INTERNATIONAL?

I replied right above already, international

@roshrosh22 said:
Oh how come i haven’t noticed that and instead go through share option as equity settled…..Thanks for that and Easy marks loss…Gutted honestly and now i’m more than certain that i’ll not pass ,so need to keep on studying P2 paper so that i can sit for exams june coming…Really gutted ,because i misunderstanding what i knew all about…..OH MY DAYS…..

Just getting one of the adjustments wrong won’t necessarily mean you’ve failed though.

Hi guys,

Question1, there was trick about the a building that 50% owner occupied and 50% used as a rental (which is an investment property),

I was not sure how to deal with it, curious how everyone deal with it?
And also there was a discount rate 5%, I am not sure which part of the question need it?

I performed badly during the exam 🙁

I added my depreciation for plant back to the net assets and used that figure for workings 3,4 and 5. When I remembered too late to cancel, just left it. Hope I won’t be penalized guys

@sambathkun said:
Hi guys,

Question1, there was trick about the a building that 50% owner occupied and 50% used as a rental (which is an investment property),

I was not sure how to deal with it, curious how everyone deal with it?
And also there was a discount rate 5%, I am not sure which part of the question need it?

I performed badly during the exam 🙁

Likewise even though the exam wasn’t that bad…..I don’t know how to proceed with the discount rate so i leave it without performing any adjustments and related to the tricky 50 percent owner occupied and 50 percent rental(inv property),I split the fair value adjustment of $10(22-12) between investment property and ppe,in the translation subsidiary as adjustment prior to fair value of net assets as Acquisition ,then proceed the depreciation charge at post charges before fair value of net assets at reporting……3c was obvious IFRS 15 revenue recognition but i missed provision on it(Claim charges)…..

Wish they could just give results right away, this wait is going to be torture!

I hope the answers I gave does award some marks as everyone else who has the similar answers on Q2 and Q3

Q2
(a)
Company bought a building at cost which was fair valued at Y/E, the company decided to treated it at investment property.

I gave the answer that company has to revalued the building first before reclassify it as an investment property. The upward revalued property at Y/E was recognized in the Revaluation Reserve.

Dr. Accumulated Dep
Dr. PPE
Cr. Revaluation Reserve

Reclassify to Investment property

Dr. Investment Property – SOFP
Cr. PPE

Thereafter subsequent revalue down/upwards company has to first charge the downwards to Profit/Loss and reclassify the previous RR to Retain earning where appropriate.

The company still has to test for impairment when there’s indication that the property may be impaired

(b) Advise on Intangible assets where company acquires fully a subsidiaries that supplies motor vehicle. I assume that the Backlog order was an IA because it generates profit for the parent, but due to the rights of using water to manufacture vehicles came with a contractual limitation that if the subsi did not utilized the water for a period of years, the right will be revoke, hence the ownership is not fully transferred to the user, but I am quite confuse where in the question does the IA exist? is the Rights to use water or the Backlog Order an IA?

(c) CGU Impairment I have messed up by using the Cash Flow at PAT for Recoverable Amount, but it should be PBT as discounting technique does not apply to Tax. I hope to have some marks for the definition of Impairment and stating the indicator in the case scenario where the CGU was impaired.

The was an impairment amount at the end because CV > RA, I hope that was correct, but I did not apply the impairment loss allocation to first the Goodwill and the other assets on pro-rata basis for a CGU.

Q3
(a) The lease of car vehicle should an Operating Lease due to the contractual limitation for penalty above 10,000 miles, and customers are not allowed to drive outside the country’s jurisdiction. Moreover Lease Standard applies that the options to purchase at the end of lease period should be lower than market value, but in the case study the lessor is selling the customer at higher than market value. So it should be an Operating Lease.

(b) I was not well prepared for Debt Instrument, only to suggest the classification to NCA Held for Sale since it will be held until 1 March 2017 for sale, and the Y/E was 28 February 2017. (more than 1 year). This is wishfully for some compassionate 1 or 2 marks

(c) This was a quite challenging question for Contingent provisions and Assets. I suggested that no provision should be made since there was no amount on the Penalty can be reliably measured, and the chance for successful counter-claims against the contractor is not probable, as well as the Penalty. However disclose in FS when the amount can be measured is material.

Administrative cost expense to SOPL, and construction cost should be capitalized as part of the retail property.

– To back track on Q1, I did whatever I can for all the workings from group structure, FVNA, Goodwill, NCI and Group Reserve, and those adjustments. I still unable to tie between Total Assets and OE&L.

I wrote as much as I can (hopefully not nonsense in majority), but unable to complete everything due to the limited 3 hours 15 mins.

@brugal84 said:
Excellent, that sounds familiar 🙂

I see. Then i made another mistake. I did not revaluated that PPE as i saw the question stated that both Parent and its subsidairy used Cost method.
Regarding to the depreciation, i charge only 50% to the P/L as i think that only 50% is owner occupied which shall be depreciated, and another 50% part is an investment property which we don’t depreciated it. I am not sure, if it right or not.

however, wish all of us pass this exam, i don’t like to re-take.

Question 1a – Foreign sub, 2 additional subs, control to control transactions, FV uplifts and depreciation, negative post acq reserves and cash based payments.

1b – the effect of individual statements and consolidated statements on the effects of yearly FV measurement on IAS 16 properties and IAS 40 investment property.

1c – ethics.

2. Covered leases from the perceptive of the lessor and effect on cash flow statement, intangible assets and impairment on CGU.

3. Covered financial instruments loss allowance (FVOCI), and apologies i have forgotten the other two areas covered.

Surprisingly, i felt Q1a) was very fair, there were not as many parent company adjustments as i expected. I did expect cash flow statements to appear…. so no doubt what June 2017 students should be expecting!

The written elements were ‘wordy’ and sometimes not very clear. There were instances when one scenario will expect you to consider more than one standard. I did write alot and felt extremely time pressured for both Q2 and Q3.

@jecksmelv said:
The discount risk should be provided for in current liabilities and added to retained losses of subsidiary 2 before translation. For the disposal, its still has control so u just increase current assets(bank) and NCI too. Other questions were pretty nice especially 2 and 3. Also found the 1b and 1c quite good because they have been examined in June 2015 questions. Those troubled about not getting Share appreciation, translation and all right shouldn’t worry cos its about each step you got right. The key is usually understanding ur IAS. Impairment of CGU 36 using before tax cashflows and impairment of financial assets ifrs9/ 13 using expected loss approach was examined. There was also a question in which the directors used level 2 fair values even though level 1 was available….overall the exam was fair to anyone who read technical articles

You made really good point on here…..About the discount risk ,i leave it because i was unaware about the step to proceed,and in respect to share appreciation right,i did all step right except that i took the grant date instead of reporting date as i haven’t notice the question asking for share appreciation rights so do you expect me to lose all the points even though the step i took was spot on?The exam was fair honestly ,but i maybe going to lose some unnecessarily points which i should have obtained but nevertheless hope we all passed because its an intriguing paper to go through again…..